Share-Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Stock Option Activity	Shares		Weighted- Average Exercise  Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic  Value (Thousands)
Options outstanding at December 31, 2013	3,090,801		$	1.76
Granted	470,000			1.08
Exercised	(139,228	)		0.83
Expired	(170,740	)		1.25
Forfeited	(16,666	)		1.32
Options outstanding at September 30, 2014	3,234,167		$	1.73	7.09	$	8
Options exercisable at September 30, 2014	2,248,351		$	1.95	6.26	$	8

 Intrinsic value is defined as the difference between the relevant current market value of the Company’s common stock and the grant price for options with exercise prices less than the market values on such dates.  During the three and nine months ended September 30, 2014, there were 6,100 and 139,228 stock options exercised, respectively, resulting in cash proceeds to the Company of $5,490 and $114,905, respectively.  During the three and nine months ended September 30, 2013, there were 0 and 10,000 stock option exercised. The Company received cash proceeds of $6,500 related to the stock options exercised in 2013.

 The weighted-average estimated fair value of employee stock options granted during the nine months ended September 30, 2014 and 2013 was $0.67 and $0.80, respectively.

 Restricted Stock Award Activity

 The Company periodically issues restricted stock awards to certain directors and key employees, subject to certain vesting requirements based on future service.  Fair value is calculated using the Black-Scholes option-pricing valuation model (single option approach).  There were no restricted stock awards issued during the nine months ended September 30, 2014. However, the Company awarded 51,523 fully vested, non-restricted shares at a $1.24 weighted-average grant date fair value during the nine months ended September 30, 2014.  These shares were issued to certain members of the Company’s board of directors in lieu of cash payment for quarterly board fees.  The expense related to these shares was approximately $62,000 during the nine months ended September 30, 2014, and was recorded in general and administrative expense.

        The Company recognized the following share-based compensation expense during the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(Thousands)				(Thousands)
Stock options
General and administrative expense	$	88	$	114	$	304	$	498
Cost of sales		2		6		10		17
Selling and marketing		32		32		94		112
Shipping and warehouse		—		1		2		3
Research and development		3		4		9		10
Total share-based compensation for stock options		125		157		419		640
Restricted stock
General and administrative expense (Board of Directors fees in lieu of cash payments)		17		28		62		82
Total share-based compensation for restricted stock		17		28		62		82
Total Share-based compensation expense	$	142	$	185	$	481	$	722

 Total unrecognized share-based compensation expense for outstanding stock option awards at September 30, 2014 is approximately $0.5 million, which will be recognized over a weighted average remaining life of 1.7 years.